HOW IAA AND CARFAX ARE PROTECTING THE AUTOMOTIVE ECOSYSTEM
A recent episode ofIndustry Insider, IAA Canada and CARFAX Canada examine the rising threats of vehicle fraud in Canada and how insurers, repairers and consumers are feeling the impact. Blair Earle and Richard Pasta break down national theft trends and outline how government initiatives are shaping recovery rates and criminal behaviour.
The conversation details how auto fraud and theft are complicating claims, resale and remarketing. Earle highlights IAA Canada’s efforts to repatriate stolen vehicles from overseas, while Pasta explains how CARFAX Canada’s data tools are flagging inconsistencies earlier in the process.
Both revisit the 2022 IAA–CARFAX collaboration, which increased transparency in the salvage and remarketing market, helping detect compromised vehicles before they re-enter circulation. They also share practical advice for spotting red flags and responding when fraud is suspected.
The episode provides a clear-eyed look at the evolving tactics of auto crime and the tools the industry is using to stay ahead.
Mackenzie Grant: Vehicle fraud in Canada is evolving, and it’s costing insurers, repair facilities, remarketers and auto finance providers millions each year from stolen vehicles and VIN cloning to claims manipulation, organized crime and digital tools are creating a new level of sophistication. So you both have a very clear line of sight into some data here. The Équité Association reported that in 2024, over 57,000 vehicles were stolen. What do those numbers mean on a larger scale, and what stands out most when you look at those data sets? Richard Pasta: Just to expand a little bit on those numbers, and according to our data at CARFAX, we’ve identified over 372,000 vehicles as having a potential fraudulent VIN. We’ve also seen a 93% increase in VIN fraud investigations just this year.
MG: Wow — and there’s also some numbers that show from the first half of 2025 there’s a promising downward trend in auto thefts across the country, with provinces like Ontario and Quebec seeing some significant drops. What does that indicate?
RP: What’s really interesting, is that while the number of vehicles being stolen has gone down, the number of vehicles actually being recovered is also dropping. Back in 2022 about 84% of stolen vehicles were found and returned. Fast forward to 2024 and that number dropped to just 60% and in just the first half of this year, it slipped a little bit more, and now it sits at 58% of vehicles being recovered. So yes, fewer cars are being stolen, but few of them are also making their way back to their owners.
“while the number of vehicles being stolen has gone down, the number of vehicles actually being recovered is also dropping. So yes, fewer cars are being stolen, but few of them are also making their way back to their owners.” — Richard Pasta
“For us, the most important thing is giving our buyers complete transparency. The VIN is essentially the vehicle’s fingerprint — it defines its history and all the data connected to it. That’s why we provide a CARFAX report for every vehicle in our inventory.” — BLAIR EARLE
MG: Yeah, and there’s a bit of government support there too, with the newly developed National Action Plan on combating auto theft, which has provided a little bit of funding there to the Canadian Border Services Agency to track those stolen vehicles leaving the country with that plan in place and border agencies being resourced a bit differently. What has the impact there of that national action plan been?
Blair Earle: So a big part of it is the National Action Plan. They’ve connected all the authorities that are responsible for the automotive network in Canada, so the Canadian Border Services Agency, the RCMP, their Interpol division, and they’ve really concentrated and worked together with manufacturers, insurers and remarketing companies on the theft that’s taking place, and as a result of that, they’ve made a big difference. They’ve deployed teams through a project called Drive Out, which was the RCMP Interpol division, and they deployed Canadian vehicle examiners to West Africa to look for vehicles that have been stolen. The big piece is that we all pay for that in the automotive car park in Canada with insurance rates, with the number of vehicles being stolen. So those efforts have really made a difference.
MG: That’s amazing! Do you think over the past several years there’s been an increased public awareness of this auto theft?
BE: I do. I think the public awareness is as a result of the efforts by all the agencies working together and Équité put together quite a team dating back to 2021 and it’s made a difference, as you know, that what I would call the technical and data fraud and auto theft has taken place in the country, and those rates rose over the last four to five years that Richard referred to the sophistication of theft. These are not smash and grab vehicles, and the public is aware of it. They’re taking extra efforts with their own vehicles and making sure they’ve got everything from a club to make sure that they protect their fobs of their vehicles in their own house.
MG: It’s definitely getting more sophisticated and Blair, something that a lot of the public wouldn’t know is happening is that you’re helping bring stolen Canadian vehicles back home from oversea ports. Would you be able to take us inside what that looks like operationally?
BE: I’ll give a brief summary at a high level, they get contacted by a client — and that could be an insurance company or a marketer or manufacturer — and they found vehicles in ports around the world. They create an assignment with us from “XYZ” country, and then all the documents are shared back and forth. The efforts that are put together by all the agencies, working together, have produced tremendous results. The vehicle gets secured, and then a transportation plan is put in place and that vehicle is brought back to Canada. Why it is so important is that it brings down the cost when we auction off that vehicle and return the funds back to the customer, which is the insurance company or the remarketing company — and that keeps all of our premiums lower in this country. So those efforts have really taken off, especially over the past 24 months. It’s very important that it continues, and the National Action Plan on combating auto theft has made a big difference.
MG: From the day to day side, there’s a lot of that cost being allocated to time that untangling and verifying and reversing. How much of that cost there do you think is simply just human hours?
RP: It’s a lengthy process to unwind or to detach a clone VIN from your vehicle. So getting ahead of it and being proactive is the best way to avoid delays when it comes time to move in or out of your vehicle. I was going to review a real world example, but really, without the vehicle history report as a visual, it’s kind of difficult to follow. So I thought I’d paint a high level picture here of what we’re seeing when it comes to owners finding out that their vehicle has been a victim of auto fraud. We see examples every day where a vehicle has been used as a trade-in on another vehicle — and at some point in the vehicle sales cycle, an inspection and vehicle history report are completed on the vehicle being traded in. It’s a pretty normal and common occurrence. Upon the review of the history report, usually unbeknownst to the owner, warning flags in the history report of that vehicle appear. The red flags vary from vehicle to vehicle, but things like the vehicle being registered in another state or another province, or service history showing up in another state or province, the vehicles appear to be leading this parallel life. It’s really crazy. Dealers nor consumers want a vehicle that’s been cloned, and mainly because auto finance companies won’t lend against them, insurance companies won’t insure them. It’s ultimately up to the dealer or the consumer to prove the vehicle is the original or the donor vehicle, and take steps to disprove or remove that cloned history. The process, Mackenzie, is not easy. It’s very time consuming and can be very, very costly.
MG: I can imagine, and I guess that kind of sets the stage for where the collaboration between IAA and CARFAX comes in. The companies paired together in 2022 and it was a very strategic move. So what was the original intention there? What was the problem that both of you, Richard and Blair, were looking to solve?
BE: For us, the most important thing is giving our buyers complete transparency. The VIN is essentially the vehicle’s fingerprint — it defines its history and all the data connected to it. That’s why we provide a CARFAX report for every vehicle in our inventory. The buyer only has to purchase the CARFAX on the vehicle that they buy, but that really lets them dig into it. As Richard said, having that CARFAX creates flags. If anything pops up out of the ordinary, we’re able to identify it and go back and do some other research on that vehicle to make sure the VIN is accurate. So it’s been a big step in the industry. Since 2022 we’ve received accolades from both our sellers and buyers for being so proactive in that process.
RP: Yeah, I echo that. The Impact team just really established themselves there as the leader early adopters and the first ones to recognize really just how important the vehicle history reports are for vehicles that have been in an accident or written off by insurance companies. Just great transparency and really says a lot about Impacts, commitment to doing things right.
